Voters pull the plug on PG&E-backed Proposition

Voters narrowly defeated Proposition 16, which would have restricted the way local governments create or expand public power service, by a vote of 52.5 percent to 47.5 percent.

Pacific Gas and Electric Co. bankrolled the proposition, spending $46.3 million of its shareholders’ money to for the Taxpayers Right to Vote Act. All monetary contributions to the Yes on 16 campaign were made by PG&E.

PG&E has argued that a two-thirds voter requirement to approve a municipal power taking over public power service is fair. Proponents also argued that taxpayers should have the right to vote before local governments can spend or borrow public money to enter the retail electricity business.

Opponents said the measure would allow the state’s for-profit utilities, such as PG&E, to raise electricity rates again and again “by protecting their monopoly and eliminating competition.” They said it was an effort by PG&E to protect its turf.

Apparently voters were more concerned about possible higher rates than local governments buying or creating power companies.

The proposition would have imposed new two-thirds voter approval requirements on local governments before they could use “public funds” — including tax revenues and various forms of debt and ratepayer funds — to start up electricity service, expand service into a new territory or implement what’s known as a community choice aggregator.

While there is only one community choice aggregator providing electricity in the state, several communities are exploring the idea. State law allows cities and counties to provide electricity in their jurisdictions through a contract with an electricity provider other than an investor-owned utility such as PG&E. Under such an arrangement, electricity customers can enter into “direct access” contracts with such an electric service provider. Electricity would be delivered through the local utility’s transmission and distribution system.